Taxing only very large corporations - that's a little more questionable, but plenty of countries (including the US) treat small businesses preferentially, so it's not like it's unprecedented.
They could pick arbitrary ways to bisect the set until they get the desired result.
About 30 companies will pay it - mostly US groups such as Alphabet, Apple, Facebook, Amazon and Microsoft. Chinese, German, Spanish and British firms are also affected, as well as the French online advertising firm Criteo.
26 companies fall under the required threshold. Not all of them are US based and there's even a French one (criteo).
Here is the full list [1]:
• Sales of goods: Alibaba, Amazon, Apple, Ebay, Google, Groupon, Rakuten, Schibsted, Wish, Zalando.
• Services: Amadeus, Axel Springer, Booking, Expedia, Match.com, Randstad, Recruit, Sabre, Travelport Worldwide, Tripadvisor, Uber.
• Advertisement: Amazon, Criteo, Ebay, Facebook, Google, Microsoft, Twitter, Verizon.
[1] http://www.lefigaro.fr/conjoncture/2019/03/20/20002-20190320...
FYI, Alibaba's revenue (~56B) exceeds that of Ebay (~10B), Uber (~11B), Expedia (~11b), Twitter (~3b), Groupon (~3v) and Tripadvisor (~2b) combined.
Yes, Amazon/Apple/Microsoft/Google/Verizon are still huge. But it doesn't mean there aren't other big fish out there.
This is just another example of Americans (and hey, I’m American) feeling they are permitted to do whatever they want, even outside of their own borders. It’s peak arrogance.
It's funny that the US is allowed to tariff anyone who breathes at them wrong under the guise of protecting US jobs/etc. but they are up in arms when another country decides to implement anything remotely seen as "against the US".
On the other hand, most revenue is probably B2B and business reclaim their VAT.
You are free to argue that the playing field can be likewise leveled by lowering corporate taxes to Ireland's levels. That's a debate for the French to have, as citizens of a sovereign country. It is not a decision to be forced on them by global tax loopholes.
yeah, so taxes make sense to pay for the roads, bridges and healthcare that these ads are using.
E.G. An oil company being taxed for the revenue it made during an oil project does not get ear-marked for oil-only usage by the government.
You may not agree with that philosophy, in which case you can decide to stop doing business in France. Considering the amount of cash GAFAs make, I would wager they will continue doing business in France and pay that 3% tax rather than miss 65M wealthy customers.
In that case you, the vendor, would need to pay taxes where you sold the game.
The problem with these large companies is that they basically pay little to no taxes _anywhere_, an optimisation that only large companies can really afford.
The sale can trivially be said to occur in a different jurisdiction or they can make zero profit because that money is owed to a another company that exists to facilitate them not paying taxes.
The only thing that they can't move is the customer which is why this makes sense.
I'm writing this via a glass fiber connection supplied by "Orange" (formerly known as France Telecom)
Google only pays VAT on purchases (for its own use) that it will sell on to customers.
They absolutely do. They implicitly use courts, police, customs, trademark/contract enforcement, etc.
On the other hand, I would argue that the market of people who would come to your country to buy your product is significantly smaller than the market of people who buy it on the internet and have it delivered---and it's fairly typical for companies sending products to France to be asked to collect any duties, customs and taxes from the purchaser. Why would electronic delivery be different ?
Yes.
Yes, by the commonly and globally accepted definition of "doing business" in a country, selling into a country is doing business in that country.
It seems to me it should be treated the same as French person coming to my country, buying my game and going back home.
No, it would be more like your company going to France, selling the French guy the game, and then coming back to the US. The burden of tax compliance is placed on you, the seller, because you are the one profiting from the activity and therefore morally (and legally) should shoulder the burden.
In fact I think it's both not very consistent with general tax law principles nor practical as the burden of complying with regulations in every country you sell to even if you don't have presence there means many companies dummy won't sell at all to smaller countries.
It's exactly consistent with general tax law in the US and internationally. It's not practical, but that's the price you pay for choosing to make money in another taxing jurisdiction. If you don't want to deal with it, make money somewhere else.
That being said, the US has a good treaty network so that the situation you describe generally wouldn't result in income tax to the US seller unless they had a physical presence in the country of the buyer. Which is exactly why the French tax at issue is an excise tax (not subject to treaty restrictions) and not an income tax (covered by treaty restrictions).
I don't think that's as clear as you try to make it be. Both parties (seller and buyer) are doing something that is in their best interest, one is acquiring a product/service for some money, the other is selling it for the money. In both cases it serves their interests, both have a moral responsibility in regards to the exchange. And you see this reflected in tax laws too where both companies and consumers pay taxes relevant to a transaction.
The seller is making money. That's what matters from a moral and legal perspective. Everywhere. It doesn't matter that the buyer is possibly also getting a benefit.
And you see this reflected in tax laws too where both companies and consumers pay taxes relevant to a transaction.
Please list even one location where both the buyer and the seller pays the transaction tax. Here's a hint: there isn't one. Either the buyer pays, or the seller pays. However, for nearly every transaction tax, the seller collects the tax on behalf of the government and remits that amount to the appropriate tax authority. (In Hawaii and Australia, the seller actually pays the tax--GET or GST, respectively-- but is permitted to pass along the tax to the customer as a separate line item on the invoice. In Hawaii, the seller then owes more tax for the additional charge to the customer.)
Note also: withholding taxes on cross-border payments are not transaction taxes. They're income taxes, which is a very different thing.